Berlin and Intel sign a $33 billion chipmaker deal after months of support talks

  • Intel receives 10 billion euros in support from Germany – Masdar
  • The move highlights Berlin’s efforts to attract foreign investment
  • Intel shares rose 0.3% in Frankfurt

The US company Intel said today, Monday, that it will invest more than 30 billion euros ($ 33 ​​billion) in Germany as part of its efforts to expand in Europe, a major project for Germany. Chancellor Olaf Scholz aspires to create a global chip center.

A person familiar with the matter said the deal, which includes two leading semiconductor facilities, includes 10 billion euros in German support.

Intel CEO Pat Gelsinger said he is grateful to the German government and the local state of Saxony-Anhalt, where the company plans to build a single plant, for “fulfilling the vision of a vibrant, sustainable, leading semiconductor industry in Germany, the UAE and the European Union.”

Under Gelsinger’s leadership, Intel (INTC.O) has invested billions building factories across three continents to regain its dominance in the chip industry and better compete with rivals AMD (AMD.O), Nvidia (NVDA.O) and Samsung (005930.KS).

The deal in Germany would be Intel’s third major investment in four days, following a $4.6 billion chip plant in Poland and a $25 billion plant in Israel.

Both the US and Europe are trying to attract big industrial players with a combination of government subsidies and favorable legislation, with Berlin worried about losing its attractiveness as a place to invest.

The German government is investing billions of euros in subsidies to lure technology companies to Germany amid growing concerns about supply chain fragility and reliance on South Korea and Taiwan for chips.

See also  Bitcoin Drops Below $62.5K as CoinDesk's BTC Trend Indicator Turns Neutral

Berlin is also currently talking with Taiwan’s TSMC (2330.TW) and Swedish electric vehicle battery maker Northvolt about setting up production in Germany, having already persuaded Tesla (TSLA.O) to build its first European giant factory there.

Frankfurt-listed Intel shares were down 0.3 percent at 1316 GMT.

The chipmaker last year announced plans to build a large chip park in Germany, along with facilities in Ireland and France, as it seeks to take advantage of the European Commission’s concessional financing and subsidies rules as the European Union tries to reduce its dependence on US and Asian supplies. .

The exact size of the investment has not yet been determined.

Gelsinger told Reuters on Friday that the gap between what Germany offered and what Intel needed was very large, but he expected an agreement, adding that his request was for it to be cost competitive.

“We lost this industry to Asia, we have to be competitive if we want to bring it back,” he said, adding that the total investment for the site would be “tens of billions of dollars.”

($1 = 0.9150 euros)

Writing by Christoph Steitz; Editing by Rachel Moore, Jason Neely, Sharon Singleton and Kathryn Evans

Our standards: Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published. Required fields are marked *